NEW redundancy packages at ERF could wipe out the number of compulsory lay-offs after German owners offered a bonus financial settlement.

After a week of wrangling, union bosses salvaged a settlement which was unanimously accepted by the workers.

The settlement, negotiated by representatives of the Amalgamated Engineering and Electrical Union and the Transport and General Workers Union, effectively doubles the statutory weekly entitlement and offers a fairer selection criteria.

370 jobs are to go at the truck-making giant - half its workforce - after accounting 'irregularities' of some £68m were discovered in August.

Workers reeling at the shock announcement, made on September 11, were then dealt a second blow with ERF's plans to discard the 'last in, first out' rule in favour of redundancy shortlists based on the company's own selection criteria.

The move was condemned by unions who said it penalised against the company's most loyal and long-serving employees.

AEEU regional officer Tony Murphy said: 'There were two problems, firstly the selection criteria and secondly, the company said they would pay just the statutory weekly entitlement ­ the minimum entitlement.

'When we met with the MAN German management team we suggested doubling the statutory weekly entitlement. To our surprise the Germans said they would then re-double this, from £240 to £480.

'They wanted a decision the same day to wrap everything up and so this went to a mass meeting, and was accepted almost unanimously.'

He said: 'The MAN representatives recognised the aspirations of our members and the unjust situation they had been placed in with the breaking of existing agreements.'

Mr Murphy said the additional payments will boost the amount of money workers leave with and so encourage more people to take voluntary redundancy.

He said: 'Because the money has been doubled, this means a lot of the older employees may change their minds about leaving. Certainly managers have since been inundated with applications and this means there will be a lot less compulsory redundancies, which is good news all round.'